August 2025: Are House Prices Now More Affordable?
As summer rolls on in Leeds, there's been an interesting shift in the property market – and for buyers in Leeds, it's one that could prove significant.
According to the latest Nationwide House Price Index, UK property prices are now at their most affordable level in over a decade. This marks a notable change in the narrative we've seen in recent months and reflects wider trends in affordability, interest rates, and wage growth.
What’s Changed in the Market?
The Nationwide report highlights that the average UK house price to earnings ratio currently stands at 5.75 times. While that figure may still seem high, it represents a significant drop from the 6.9 times earnings recorded during the post-COVID property boom just a few years ago.
To put this into perspective, we haven’t seen such levels of affordability since before the 2008 financial crisis. Back then, the market was reaching unsustainable peaks, and history showed us what followed. Today, however, the context is different, and the affordability shift is being driven by positive economic factors rather than unsustainable borrowing.
Key Drivers Behind Improved Affordability
There are two major factors currently helping to ease the affordability gap for property buyers in Leeds and across the UK:
1. Falling Interest Rates
The Bank of England base rate currently sits at 4.25%, with expectations of a further reduction to 4% in the coming days. Lower mortgage rates directly improve affordability by reducing monthly repayments – especially important for first-time buyers or those looking to move up the ladder.
2. Rising Wages
Over the past few years, we've also seen steady wage inflation, which has boosted average household earnings. While the cost of living has also risen, this increase in income is beginning to close the affordability gap that many buyers have faced.
What Does This Mean for Buyers in Leeds?
From our vantage point in the Leeds property market, this improved affordability, paired with stabilising prices, is creating a favourable environment for buyers. Whether you’re a first-time buyer, downsizing, or searching for your next family home, the current market conditions are offering more opportunity than we've seen in recent years.
It's also worth noting that while opinions on market reports may vary, we always focus on the insights that matter most to our local clients. We’ll continue to monitor industry trends and bring you balanced updates every month.
Looking Ahead
We’re expecting more movement in interest rates over the coming months, which could further support affordability. As always, if you're considering buying or selling in Leeds, now is a great time to get professional advice tailored to your circumstances.
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